your next step
We have now arrived at the conclusion of our 12-Step Journey.
Along our path, we have brought to light the detrimental impact
our own emotions and behaviors can wreak on our investments.
We have taken a brief walk through the milestones of
financial science and been enlightened by a group of academic
legends who paved the way by contributing research that
facilitates our ability to better understand risk, return, and the
collective wisdom of people and markets.
We have crossed the path of some fallen stars who provide
a cautionary lesson on why we should primarily respect the
marketâ&#x20AC;&#x2122;s uncanny ability to spontaneously price all known
information and to willingly accept that the current price is the
best estimate of a fair price.
We have been challenged to understand the futility of blindly
chasing after winning fund managers, knowing their recent hot
performance is a function of luck, not repeatable skill.
We have learned the deleterious results that come from
attempting to predict the future performance of markets, sectors,
or styles and the erosive costs associated with this speculation.
We have explored the probability of outcomes and have
been guided to an understanding of how and why risk and
return walk hand-in-hand.
We have traveled backward in time to learn that the travails
of today are not so dissimilar from those of history and that the
precise risk experienced in the past will never be the same, but
the ability of a free market to price those risks will be the same.
Global capitalism has continued its onward march, allowing